Whether it’s a basic cash flow spreadsheet, or bespoke account software – the chances are, you’ve got some sort of financial management information system in place already. Collecting management information is critical to the running of any business.
But in order to truly grow your business, you’ll need your management information to be up to scratch, learning how to use systems and data to your advantage. Reporting tools can be incredibly useful, as well as business accounting apps – or alternatively, you can outsource to an expert for a more personalised approach.
But when it comes to the basics of how financial management information can grow your business, here’s a step-by-step guide.
Step one: Identify the key performing indicators (KPIs) for your business
Key performance indicators help you to evaluate your progress or success within a particular task, project or activity. For example, if one of your business goals is to increase brand awareness, a key performance indicator would be to look at number of users visiting your site. This is a measurement that would indicate that your brand awareness is rising.
When choosing which KPIs to track, it’s essential you make sure they’re realistic, personalised to your business and measurable. KPIs that do not fit this criteria will not be useful for your business, and ultimately, your growth.
Secondly, ensure they match your strategic objectives. Creating KPIs that do not align with your business goals is essentially the same as tracking irrelevant or useless information.
Finally, ensure your KPIs are looked at regularly, updated and checked. Are you still collecting the data for these KPIs? Are they still relevant?
Step two: Analyse your chosen financial management information
So you’ve collected your financial data – now what?
Data is only important if you use it. Whether you’ve got basic cash flow spreadsheets or in-depth accounting software, if you don’t use the data at your fingertips, it’s pointless. Pull together all the data you have – sales and profit figures, cash flow statements, cost projections and more. Break it down and analyse by department, by product line, and by country. The more detail you have, the more trends and insights you’ll be able to uncover from your reporting. Once you have these insights, then it’s time to leverage.
If you’re not sure where to begin analysing your financial MI, speak to an expert who will be able to pull these trends and insights for you.
Step three: Design and implement bespoke reports
Now you’ve analysed your data, it’s time to build bespoke reports. Using the KPIs you’ve identified in step one, compare your figures against your KPIs and build a visually engaging report that can be used indefinitely.
Decide the frequency by which you want to update the report – annually, monthly, weekly or even daily. Make sure the style, format and level of detail is relevant for your business. Reports that contain a lot of unusable data become quickly irrelevant and lost in a random file.
Report building is manual and time-consuming, and often takes many attempts to build a report that is user-friendly and relevant. Outsourcing to a financial expert frees up your time to make this process efficient and valuable – with high-level reports at your fingertips.
Step four: Deliver actionable insights and plans
What are your reports indicating? Use your reports to identify actionable trends and plans for weeks, months and years to come. Share your insights across the wider business to aid better, more informed decision making at every level.
In doing so, you’ll be on track to drive your business forward with data and kick-start business growth.
Outsourcing your financial management information
Getting started with financial management information can be an overwhelming step – and if you’re new to it, it might take months, if not years, to get to know your data and how to best utilise it.
Outsourcing your financial management information to financial experts at The Finance People, you can guarantee a panoramic view of your business’s financial activities.
At The Finance People UK, our experts have years of financial management information under their belts. We have found that small and medium sized businesses often do not have the in-house capability to leverage financial MI to it’s greatest potential. That’s where we can help. We’ll help you to collect, analyse and evaluate key financial management information to drive your business forward.